Canada funds chip network as U.S. leads in technology

---

---

Canada is investing $120 million over five years to strengthen its chip sector amid concerns about falling behind the U.S. Industry Minister François-Philippe Champagne revealed this from the federal Strategic Innovation Fund. The investment backs a $220 million initiative led by CMC Microsystems, called the Fabrication of Integrated Components for the Internet’s Edge (Fabric) network. It aims to aid Canadian startups in developing and commercializing advanced technologies, offering subsidies for prototypes and access to essential tools and training. 

Gordon Harling, President of CMC, emphasized that supporting Fabric ensures Canada's leadership in semiconductor innovation and advanced manufacturing.

This funding follows a $187 million joint investment by IBM, Canada, and Quebec to expand IBM Canada’s chip packaging facility in Bromont, near Montreal.

While some hail a resurgence in Canada's chip industry, critics argue Prime Minister Justin Trudeau's administration hasn't kept pace with global competition, especially after the U.S. Chips Act of 2022 allocated $39 billion in direct grants and $75 billion in loans to boost American semiconductor production.

In contrast, Trudeau's government promised billions in subsidies under the Inflation Reduction Act to attract global automakers to build electric vehicle batteries in Canada.

Paul Slaby, director of Canada’s Semiconductor Council, criticized Canada's lack of a clear industrial strategy for the chip sector. Speaking at the International Economic Forum of the Americas conference in Montreal, Slaby noted that Canada is just beginning to build a dedicated team for the industry. He suggested Canada follow the Netherlands' example by seizing a niche in the global supply chain, as ASML Holding NV has done with its photolithography machines.

Since the Chips Act announcement, the U.S. has launched over 50 semiconductor projects. Slaby proposed a semiconductor pact between Canada and the U.S. to leverage competition with China and align with American interests in this critical industry.